It seems every cell phone comes with a digital camera. Yet a new study indicates camera phones no longer cut it with consumers used to increasingly powerful digital cameras.

Next year, sales of camera phones will peak and begin to decline, according to a new In-Stat study.

Rather than a replacement, camera phones are being compared to today's digital cameras and coming up short, according to analyst Bill Hughes, the report's author. Camera phones cannot deliver what consumers want: greater picture resolution and more flexibility using pictures taken.

The roadblock of greater picture resolution and more storage options means camera-phone adoption will run out of gas. Last year's 40 percent adoption rate will be the high-water mark for camera phones, Hughes told internetnews.com.

When camera phones first arrived in 2001, they were pitched as an option allowing consumers to snap quick photos. Cameras were a lucrative feature for carriers, which profit by photos being sent over-the-air by subscribers.

As consumers buy digital cameras with resolutions greater than 1 megapixel, phone users demand equal quality from camera phones. In-Stat found less than two percent of those surveyed would buy a camera phone offering less than 1 megapixel resolution. More than half of the survey would balk at camera phones under 2 megapixels.

"People want the kind of resolution they have in their digital cameras," said Hughes. But higher resolution creates another dilemma: Larger files aren't easily sent over the phone. One answer, memory cards, aren't being considered by carriers.

"It kind of defeats the carriers," Hughes said.

With low-resolution photos that cannot be easily exchanged, the consumer survey found camera-phone users take fewer than 10 pictures per month.

"What caused camera phones to take off, people aren't using it for that anymore," Hughes said.

Camera phones won't vanish, but will support less-demand applications. Two possibilities: scanning bar codes at retailers and retina-screening for security.

Consumers are also opting to buy phones with different features, such as push-to-talk.

"Ultimately, there is nothing in it for carriers" to upgrade camera phones to meet consumers new expectations," according to Hughes. "It's dangerous to make the assumption this market will grow unabated."

Reprinted from internetnews.com